Tesla Analyst Says Demand Fears 'Overblown,' But Has Some Concerns As Used Car Prices Plummet

A Tesla Inc TSLA analyst is significantly lowering the price target on the stock with concerns on full self-driving pricing and vehicle demand.

The analyst note comes with continued reports of low sales and used vehicle prices.

The Tesla Analyst: RBC Capital analyst Tom Narayan maintained an Outperform rating on Tesla while lowering the price target from $440 to $320.

"Much of the attention around Tesla has centered on its recent delivery performance in Jan and Feb in Europe and China," Narayan said.

Demand fears are likely overblown, according to Narayan. Europe and China, where Tesla is losing market share, represent a small portion of Tesla's overall vehicle sales, he adds.

Along with the potential for demand concerns, the analyst lowers FSD pricing assumptions and robotaxi penetration rates.

Narayan said FSD pricing could drop from $100/month today to $50/month in 2026.

"Level 2+ autonomy offerings are increasingly becoming standard features with some OEMs intentionally not seeking to make it a profit center, but rather as a product differentiator."

Tesla could also see lower than previously anticipated market share for robotaxis in Europe and China. It’s likely that domestic OEMs "dominate the market,” he says.

The latest price and market share changes lead to a lower sum-of-the-parts valuation with FSD going from $383 billion to $211 billion and robotaxis going from $879 billion to $641 billion.

Narayan also forecasts lower deliveries with an estimate of 11% delivery growth in fiscal 2025, down from an original forecast of 14% delivery growth.

Why It's Important: The big question from Narayan and other analysts is whether the lower delivery numbers are due to "political dynamics,” or have to do with the planned factory shutdowns for the Model Y refresh. Perhaps it’s a combination of both.

Electrek recently highlighted the sharp decline in used car prices for Tesla vehicles. The report said Tesla used car prices are falling three times the rate of the overall used car market.

Using data from CarGurus, the report said Tesla used prices are down 3.7% over the last three months and down 7.3% over the last year, compared to drops of 1.1% and 2.7% respectively for the overall used car market.

Among Tesla vehicles, the used car prices for the Cybertruck and Model S have been hit hardest falling 11.5% and 8.3% respectively over the last three months.

Benzinga recently polled readers to see if President Donald Trump‘s purchase and praise for Tesla would impact their future vehicle-buying activity.

“Donald Trump recently bought a Tesla. How does this affect your view of Tesla?” Benzinga asked.

Here are the results:

I will never own a Tesla: 53%
I’m more likely to buy a Tesla: 23%
I’m less likely to buy a Tesla: 14%
I already own a Tesla: 10%

The poll may have some bad news for Tesla fans and investors with the majority saying they will never own a Tesla vehicle.

The good news is that of undecided non-Tesla owners, 23% said they are more likely to buy a Tesla while 14% said they are less likely to buy a Tesla on account of Trump’s purchase and sales pitch for the EV company.

Tesla’s sales have dropped sharply in recent weeks, accompanied by demonstrations and vandalization against the company’s vehicles, dealerships and charging hubs, according to ABC News. Declining sales are evident not just in the U.S., but also throughout Europe, China, and Australia.

A recent report from Electrek citing inventory checks and new order delivery timelines in the U.S. shows that so far Trump’s purchase and event has had a minimal impact on Tesla’s sales and demand.

Tesla’s first-quarter sales figures, which will include the month of March will be among the most watched in recent years given boycotts, sales declines in Europe and now Trump’s sales pitch.

TSLA Price Action: Tesla stock is down 6% to $223.76 on Tuesday versus a 52-week trading range of $138.80 to $488.54. Tesla stock is down 41.0% year-to-date in 2025 and up 28.8% over the last year.

Tesla stock is now trading below where it was when Trump won the 2024 election. Tesla stock closed at $251.44 on Nov. 5 and opened for trading at $284.67 on Nov. 6 after Trump’s victory was confirmed.

The stock is down over 50% from all-time highs set in December.

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